Turning people costs into numbers leaders care about
Step 1 / 3·The true cost of one person leaving
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Learning objectives — after this module you will:
- Calculate the true cost of turnover
- Quantify the cost of an unfilled role
- Present numbers with their assumptions, honestly
The true cost of one person leaving
See the submerged part of the iceberg.
Asked 'what does one person leaving cost', the familiar answer is job advertising and agency fees. That is the visible part, and usually the smallest.
Four cost groups when someone leaves
| Group | What it includes | How to estimate it |
|---|---|---|
| Replacement hiring | Advertising, agency fees, interviewer time, assessment costs | The easiest — take real figures from your last few hires |
| Vacancy cost | Work nobody is doing, or others absorbing it and dropping output on their own work | Days vacant × the daily contribution of that role |
| Ramp-up to full productivity | A new hire usually needs months to a year to match the person who left | Estimate a monthly productivity percentage and sum the shortfall |
| Lost knowledge and relationships | Client knowledge, undocumented process, internal relationships — hardest, and often largest | Do not force a precise figure; describe it with a concrete example so leaders sense the scale |
Do not invent a number for the fourth group
Lost knowledge and relationships are very real and very hard to quantify with confidence. If you attach an unfounded figure and are asked 'where does that come from', your whole presentation loses credibility. The safe approach: quantify the first three groups, and describe the fourth with a real example — 'when Nam left, our three largest clients only ever dealt with him, and the handover took two months.'
Key takeaway: Four cost groups; quantify the first three and illustrate the fourth with a real example rather than a made-up number.